Taxing the Exceptions

February 26, 2009 (InfoPowa News) — Internet gambling on Fantasy Sports, one of the notorious carve-outs in national U.S. anti-online gambling legislation, is under the microscope in Maryland, where Delegate John Olszewski Jr., D-Baltimore County, presented a bill this week to a House committee to exempt fantasy sports from state gambling prohibitions.

The state politician has a taste for modern communications, it seems, and presented humorous fantasy football commercials on YouTube to emphasize the growing popularity of the Internet-driven pastime.

While fantasy sports are exempted from federal gambling restrictions, the issue is not specifically addressed in state law, reports Fox News. Olszewski's bill would not extend to popular college basketball office pools, which are illegal under state law.

"We're just taking this (federal) language and inserting it into Maryland law," Olszewski said, giving a brief explanation of fantasy sports and showing members of the House Ways and Means committee in Maryland his personal fantasy football team, the "Outlaws." Olszewski's YouTube videos — one portrayed a groom apologising to friends mid-wedding ceremony for missing a fantasy draft — drew laughs from the committee.

Fantasy sports allow online players to compete against others based on statistics accumulated by real professional athletes or teams. Owners draft, own and trade athletes from most professional sports, in either free or pay leagues with prizes.

Several national organizations offering fantasy gaming opportunities have limited Maryland residents from fully participating due to concerns over the ambiguity of state law, Olszewski said. Maryland is one of six states whose residents are ineligible to win cash prizes from CBS Sports' fantasy football pay-to-play leagues.

The legislation is critical to giving Maryland residents the same opportunities to win prizes as fantasy owners in many of their neighboring states, said Justin Cleveland, association manager for the Fantasy Sports Trade Association.

"It allows Maryland players to be able to participate in what has become a national pastime," Cleveland said. "If this legislation goes through … then they're just going to bring the state of Maryland into sync with the majority of the country."

The state has issued a report claiming fantasy sports would "probably not" be considered illegal gambling under state law. But the report also says "there are benefits to stating this finding explicitly in the code."

More than 27 million people nationally play fantasy sports, which is an $800 million industry, said Cleveland, who offered written testimony in support of the bill.

Solidifying the legality of fantasy sports might also bring in more money for the state through the sales tax.